Budgeting Fundamentals

Department of the Navy
Bureau of Medicine and Surgery

An operating budget is defined as an annual financial plan used to ensure orderly execution of approved Navy programs. This process described below is generic for clinics and military treatment facilities with some applications to the operational setting.

The Budgeting Process

• Your input is required by the commanding officer during the annual "Budget Call." In the budget call, the commanding officer will communicate policy decisions, assumptions, and instructions based on guidance received from BUMED. The budget call is your opportunity to have input into the budget process. Budget call occurs in the March-April time frame for the next fiscal year.

• Don't hesitate to ask your comptroller for help in preparing your budget. He or she will help you work through the formats and assist you with the technical skills necessary for a good budget package for your department.

• Don't wait until the budget call to start working on your budget. Start working on your budget the minute you take over as department head or division officer. This recommendation will reap tremendous benefits in the future.

• Budgets are based on historical trends. What you received last year, with an adjustment for inflation, is usually what you will get the following year. Some of the factors determining increases or decreases to budgets are workload measurements, cost increases, availability of providers, new programs, canceled programs, and also the availability of resources provided to BUMED.

• Directorates and departments usually receive budgets in the form of operating targets (OPTARS) issued by the comptroller at the direction of the commanding officer.

• Once you receive your OPTAR, budget performance must be monitored. If 50 percent of the funded period has expired, you have 50 percent of your funds spent. As an example, if your quarterly OPTAR is $100 and 50 percent of the quarter has expired, to be right on target means you would have spent $50. This will protect you, in most cases, from having your funds pulled to cover someone that is over obligated or over committed. Don't waste your money just to have a good spending rate. Plan your buying as you would items in a household budget.

• Don't spend over your alloted budget. If you think you will go over your budget, inform the comptroller beforehand. He or she will work with you to try to resolve the shortfall.

• Manage your budget appropriately. The comptroller gives weekly reports to the commanding officer. If you are over your budget and you have not talked with your comptroller, he or she may not be able to defend your management of the budget to the commanding officer.

• Never let patient care suffer because of the lack of resources. If you feel adequate patient care cannot be provided with the resources available, notify the comptroller and arrange an appointment to discuss your budget.

• The midyear review is a budget review process in the command and BUMED, whereby funds are redistributed to those commands or departments most in need. The mid-year review process usually starts in December. Action on midyear review items may not come until April when the process is completed.

• The midyear review is also a time for you to utilize unused resources. Ensure your workload is documented appropriately or you have very good justifications for additional funds.